Wednesday, March 11, 2009

Smart Strategy?

You have to wonder, if "sunny" Harper is the best strategy for the Conservatives, as they try to deal with the economy. Tom Flanagan offers some of the rationale:

But the economy is a different thing, Mr. Flanagan said. If Mr. Harper comes across as pessimistic or discusses the spectre of a depression, Canadians will eventually agree with him that things are bad. Then, they will look to somebody else to replace the Tories.

"That can only help your opposition," Mr. Flanagan said. "If you keep saying how bad things are, eventually people are going to say, 'Well, hey, let's get a government that can fix it.' "

The Prime Minister's approach is also reminiscent of a change in tactics adopted by U.S. President Barrack Obama, who only a few weeks ago began injecting more hope in his speeches. The President and his advisers had picked up that Americans might be blaming Mr. Obama, in part, for the unprecedented collapse of the stock market. Mr. Harper has apparently concluded the same.

First off, the Obama example is a non-starter, because he was running against an incumbent, he had no responsibility for the predicament, "hope" relative to the current administration. If the Conservatives are trying to mirror Obama, it's a mistake, because there is no similarity, in terms of circumstances.

Flanagan argues that by articulating doom and gloom, you help the opposition, but I have to question that logic. When you paint a rosy picture, and we've already seen this before, then you effectively set yourself up for failure, should the indicators not match the optimism. In this way, you actually arm the opposition, because they can paint you as out of touch, not recognizing the true severity. Case in point, just watch for the reaction on Friday, should the employment numbers look bleak- they will surely contrast the reality with Harper's misplaced optimism. Given the unknowns, raising expectations leaves you vulnerable. Fast forward a few months, if things deteroriate further, with little evidence of recovery, Harper's speech yesterday will make for a nice contrast ad, he will look the fool.

In addition, the venue Harper chose for his optimistic assessment is completely inappropriate. Harper basically went to ground zero to offer an upbeat picture, which is strange, given Ontario is experiencing every bit as severe a downturn as the other jurisdictions he used for perspective. I doubt the Harper line resonated with people losing their jobs, if anything he highlighted a disconnect.

I would argue, the best strategy for the Conservatives would be to lower expectations. If a pessimistic view turns out to be accurate, Harper can argue that he accurately understood the situation, and his government moved within this reality, nobody is surprised, you've softened the ground for more bad news. If the economy were to perform better than assumed, Harper can then take credit, his policies are working, light at the end of the tunnel. What Flanagan doesn't seem to articulate, Harper does have some latitude, because people do understand that this is a global phenomenon, nobody realistically thinks we're immune, a political buffer exists for ultimate responsibility. Better to use that reality, rather than trying to paint Canada as poised for a strong rebound, when that is merely a theory at this point. The current strategy voluntarily sets the Conservatives up for future failure, which makes it a curious decision at best.

UPDATE

A couple early assessments, that point to the "gamble" in Harper's position:

Economists said they're not forecasting Canada to recover significantly ahead of peers.

“That's the part I am not so sure about. That's certainly not what we forecast,” Toronto Dominion Bank chief economist Don Drummond said. “We see a fairly similar pace of recovery as the United States. In fact, under the great economic principle of what falls the most usually rebounds the fastest, the U.S. would actually have the advantage.”

Added BMO Nesbitt Burns deputy chief economist Douglas Porter: “I don't think we're going to be a quarter or two ahead of the U.S. I think we'll turn at roughly the same time. And I don't think we're going to come flying out of this.”

Of note, both these economists were also predicting a recession, at the same time Harper was telling people he didn't see one coming, it would have happened already, we would have a surplus and they should buy stocks.

UPDATE

Less than 24 hours later, that pesky Kevin Page is undermining the Harper delusion:

He says an even better indicator is gross domestic income, which measures Canadians' purchasing power, and that shows a plunge of 15.3 per cent in the fourth quarter over the previous three months.

...that it is far worse than the 1.5 per cent contraction in the U.S. during the same period.

7 comments:

Regarding Obama, the other blindingly obvious fact is Obama didn't spend most of last year and particularly last autumn talking about how sound the economy was and touting the prudent, omniscient decisions he had made to ensure all was well.

I seem to recall such talk was a hallmark of Harper's re-election campaign. Worse yet for Harper, it wasn't just folks like you and me who noticed it. A voting public - albeit with lower numbers than normal - were also engaged. It's not so easy to erase those messages as it has been on other topics in which Harper has flip flopped later on.

Also I'm watching Obama speak as I type this and I'm so struck yet again that even when he is outlining his important points on getting funding approved in Congress, he magnanimously recognizes the Congressional processes and the important role of individual seniors.

Hard to imagine alien petulant Harper offering even a casual recognition that he understands the role of the opposition to ensure accountability.

You just can't take a Bushism of "for or against us" and turn it into an Obama speech.

I'm always just struck at how small a man Harper really is at his core. He blusters. He doesn't lead.

Whooee! Well, Steve, I reckon there's a Catch-22 at work here. You've made the case against optimism. The case for pessimism isn't all that strong, though. As you say, low expectations are easily met. Public pessimism by a PM could have a negative impact of its own. Cheerleading may help bolster confidence and investment.

I don't think Harper thinks about anything other than what his statements will do to help him and his party. He has been in constant campaign mode since before he took office in 2006. This is more of the same rosy campaign talk. That's all he's got.

There is a downside, no matter what Harper says now. My main point, if you use foresight and think ahead, is it better to have misread the extent or to have set expectations low? If you conclude Harper can't win now, then I see more danger in being optimistic, because that will present a detached frame. If I'm a Liberal strategist, I have yesterday's speech held in a special file, under "for future reference".

Optimism is more risky, I agree. Harper can't help himself, though. He must continue to campaign. As the incumbent, campaigning necessitates painting a rosy picture.

If things go south, he can just say he didn't think it would be prudent for a PM to badmouth his own country's economy when the confidence of investors was crucial to minimizing the effects of the downturn.

I do agree that his rosy outlook, if proven wrong, will hurt him. He can blame the international economy when things go bad and take credit when things go good.

Harper's new strategy flies in the face of what we can assess as his natural stance -- downplaying with the payoff being 'surprisingly better results'... And how did he deal with this whole mess when it first hit the fan? He sounded uncomfortable, alarmed and less than a cheerleader. Will people buy this sudden 160 turn? It likely depends upon how the media helps him sell it - will they conveniently forget about all the past stuff, from no deficits, we'd have already had a recession, his 'a depression' declaration, his non-fiscal update, and that ctv interview where he sounded waylaid and 'concerned', not the least bit optimistic.Right now, I'd have to give his strategy passing grade, because the images I'm seeing in the media is Liberals and NdPers talking negative (not necessarily about the economy, more so about the CONs, but you know the discerning viewer/reader isn't always picking up that difference) while Harper and Flaherty are being bullish on Canada. The same team that said they wouldn't recommend people invest in Ontario. What a weird world we live in...